Why is transparency important in the programmatic supply chain? I get this question a lot.
Recently, I delivered a keynote on radical transparency at the Programmatic Summit in Sydney. The session went well—until my chosen subject was quickly dismissed by the very next speaker.
The session that followed questioned the emphasis on transparency in the programmatic supply chain. In summary, the speaker said: “We don’t have transparency into the cost of sugar in a can of soda, so why should we care about how much the end publisher gets when we buy an ad campaign?”
On the surface, this may seem like a reasonable question. That being said, buying a can of soda is not the same as buying a programmatic ad campaign. Here are five reasons why transparency is more important in the programmatic supply chain than the other.
Variable value
Generally speaking, cans of soda are the same and sell for a similar price. Advertising impressions, however, are not the same, and the price and value varies dramatically across the board. This variation in value makes it easier for intermediaries to insert themselves into the supply chain, or to simply increase their costs unseen. Fee transparency can shine a light on exactly where the fees are going, so buyers and sellers can make sure each intermediary is adding value. This creates a more efficient supply chain.
Multiple paths
An impression can take many paths between the publisher and the buyer—via different SSPs, DSPs, networks, and exchanges—while a can of soda typically has only one distributor in a region. These multiple paths make it easy for impressions to leak as they are passed from system to system, enabling bad actors to hide in the chain. This leakage reduces purchasing power for buyers, can disrupt demand for content producers, and constrains the true market valuation of publisher inventory. Transparency can help root out this kind of fraud: A simple first step would be to get on board with Ads.txt.
Auction Rules
Programmatic impressions are often sold in an auction where the rules—such as first or second price, and soft or hard floors—aren’t well defined. Any auction where buyers don’t know what type of auction they’re participating in is problematic. Imagine if your local convenience store sold soda this way! Transparent auctions make sure buyers and sellers both know the rules. When buyers know the rules, they get better return on ad spend, achieve higher win rates, and can more easily find the optimal route to their preferred supply.
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